TACTICS BY PHASES OF THE NEGOTIATION PROCESS

Phase	Supplier Tactics or strategies	Buyer Tactics or strategies
Conceptual planning of Product or Service by Supplier	Features vs competiton / positioning	None
	Price goals / ROI
	Channels to sell through
	Product life cycle
	Financial model with volumes, pricing, service pricing, discounts, allowances
	Standard terms
	Warranties
Product or service development	Sales programs	None unless involved in a custom development activity
	Sales & service strategy
	Fine tuning conceptual positions.
Marketing & Prospecting	Legitimacy - brochures, standard form agreements, standard warranties, published discounts.	Educate internal customer on need to manage communications with suppliers to maintain maximum leverage
	Design Assistance	Show them competition
	Avoid gatekeepers	Manage Supplier personnel access
	Understanding requirements, schedule, need, competition all for use in sale / negotiation.	Manage information shared to maintain leverage and competition
Prequalification by Buyer	Legitimacy	Request information which will help with negotiation - e.g. financials
	Work on buyer’s psychological needs	Tour location to discover information which will help in negotiation - other customers, load, processes
	Seek understanding of requirements (benefits), schedule, need, competition for later use on price / discounts	Talk with none sales people to get non-sanitized information to be used later
Bid / quote / Proposal	Apples, Oranges & Pears	What if / alternatives for total cost analysis
	Bait, for later switch	Apples to apples
	Price strategy to drive wanted decisions	Seek added information to aid in negotiation
Negotiation preparation	Negotiation plan	Negotiation plan
	Goals, minimums	Goals, minimums
	Tactics	Tactics
	Anticipate buyer and be prepared with counters	Anticipate seller and be prepared with counters
	Prepare alternatives	Prepare alternatives
	Seek input on status & competitive position	Insure competitive position continues (real or perceived)
Negotiation	Legitimacy - Company Sandards	Legitimacy - Company Standards
	Benefits & Value	Cost & Margins
		Target price
		Crunch - Have to do better
		Nibble price
	List price & standard discounts	Competitive price
		Competitive situation requires high discounts and / or allowances
		Require cost breakdown & divide & conquer the parts
	Use volume or commitment to maintain price	Evalute costs from volume perspective to identify if price breaks are real or artificial
	Funny Money	Cost in real dollar terms
	Legitimacy - market and other customer	Legitimacy - market, other suppliers and other customers
		Remind them of their competition.
	Standard terms	Effect of standard terms on total cost & their competitiveness
	Why they can’t do it	Why you need it and the impact if we don’t get it
	Take it or leave it	Take it or leave it
	Offer little & slowly move up	Make high demands and slowly make concessions
	Use buyer’s need and schedule against them	Exercise patience / avoid giving them that level of understanding
	Use patience	Use seller’s and salesman’s needs and goals against them - e.g. time of order versus goals, quotas, sales numbers etc.
	I can’t go further	I can’t go further
	Don’t give in or look for the need behind their position	Don't give in or look for need behind their positon
	Nibble away at non-price issues	Convert everything to price
	Convert everything to price	Nibble away at non-price issues
	Use deadlines to drive commitments (price goes up on ....., need your order by ...... to make production, special deal if you commit now because ......	Know the organization well enought to know whether they are real. If not use patience and still insist on getting the sale deal / schedule
	Use market changes to drive increases	Use past performance to identify total cost and need for reductions.
	Let’s split the difference	Let’s split the difference.
	Buy time to strenghten your position	Buy time to strengthen your position
	Know your value, competiton and hold firm	Auction - If you can beat this price you have an order.
	Faking	Check facts, references
	Overload them with data	Prioritize demands
	Apparent withdrawl - backs away so others can re-address prior concessions	Go around the negotiator to higher level
	Hold firm and be prepared to risk losing the business (you want, but don’t need the deal)	Tell them what will happen if they don’t comply
Mobilization	Switch (from Bait)	Hold firm to bid or proposal, insure contract protects against this.
	Substitutions	Evaluate to insure you are not getting a diminished value - really equal
	Nibble changes	Hold firm or look for price or other concessions
	Hold firm or seek price increase	Nibble changes
Production	Take advantage of your position when buyer wants any change:	Seek detail for change and use detail to negotiate
		Remind them of the competion or ability to change suppliers
		Remind them of future business potential
		Take advantage of your position when seller wants any change
Close Out	Get payment ASAP	withhold substantial amounts until all work is completed as leverage to get them to complete.

Warranty	Seek additional charges for no-problem found situations	Use potential future business to drive performance.
	Sell follow-on service contract	Use potential service contract to drive performance
		Build performance standards and cost / penalties for non performance in agreements
		Get escallation and key contract list and elevate key issues
Claims	Seek compensation for claims - e.g. representations, breaches,	Avoid representations and firm commitments unless benefit is substantial and outweighs the potential risk
	Look for commitments to future business to avoid claim.	Use potential of future business to have supplier not pursue.
	Avoid representations and firm commitments	Seek compensation for claims - e.g. representations, breaches, reliance